U.S. stock-index futures fall as lawmakers wrangle over budget

IN ANTICIPATION OF A potential government shutdown, the Dow Jones Industrial Average dropped 117 points, or 0.8 percent, to 15,078. Economists estimate that a shutdown could slow fourth-quarter U.S. growth as much as 1.4 percentage points, depending on its duration.

LONDON - U.S. stock-index futures slid, signaling equities may fall for a second day, as politicians neared a deadline to approve a budget, without which the government may partially shut down.

Bank of America Corp. fell 1.4 percent in early New York trading and JPMorgan Chase & Co. slipped 1.2 percent in Germany. Apple Inc., the world’s biggest technology company, lost 1 percent in early trading. EBay Inc. declined 0.9 percent after losing a bid to dismiss a U.S. lawsuit alleging violation of antitrust laws.

Standard & Poor’s 500 Index futures expiring in December fell 0.8 percent to 1,673.4 at 7:30 a.m. in New York. Dow Jones Industrial Average contracts dropped 117 points, or 0.8 percent, to 15,078. The S&P 500 Index has added 3.6 percent this month, extending its quarterly gain to 5.3 percent, as the Federal Reserve kept its $85 billion of bond-buying a month. The central bank will pare the size of purchases in December, according to 59 percent of 41 economists in a Sept. 18-19 survey.

“U.S. politicians have until midnight to reach an agreement to avoid a shutdown, and all eyes are on the Democrats and the Republicans,” Nick Skiming, who helps manage about $10 billion at Ashburton Ltd., said in a telephone interview from Jersey, the Channel Islands. “We’ve seen very little give and take so far.”

U.S. lawmakers have to approve emergency legislation by midnight to keep the federal government operating from tomorrow, the beginning of the 2014 fiscal year. Failure to do so may result in as many as 800,000 federal employees being placed on temporary unpaid leave.

Senate meeting

The Senate convenes at 2 p.m. in Washington today, after a weekend with no signs of negotiations from Republicans and Democrats. House Republicans want to delay President Barack Obama’s Affordable Care Act for a year and make other changes to the health law. The Democrats vow not to let that happen.

In a government shutdown, essential operations and programs with dedicated funding would continue. The move would reduce fourth-quarter economic growth by as much as 1.4 percentage points depending on its duration, according to economists at Moody’s Analytics Inc.

The S&P 500 fell 1.1 percent last week, its first weekly drop since August, amid concern a budget impasse will hurt economic growth. Three rounds of Fed stimulus and better-than- forecast corporate earnings have pushed the S&P 500 up 150 percent from a March 2009 low.

1954 rally

U.S. stocks are trading virtually in lockstep with 1954, the best year for American equities and the time when shares recovered all their losses from the Great Depression, data compiled by Bloomberg and Bespoke Investment Group show. In no other year are the trading patterns more similar to 2013 since data began 86 years ago.

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